TECO Deal Includes Rate Freeze, Solar Expansion

Tampa Electric Company has asked state regulators to approve a proposed agreement that would largely freeze base rates though 2021 and help lead to an expansion of solar energy.

The agreement, filed Wednesday at the state Public Service Commission and announced Thursday, came after negotiations between Tampa Electric, the state Office of Public Counsel, business groups and federal-government agencies. If approved by the Public Service Commission, it would take effect Jan. 1.

The announcement said the utility plans to add 600 megawatts of solar-energy capacity, enough to power 100,000 homes. The first two projects, totaling 150 megawatts, are planned to be finished in September 2018, with additional phases completed in 2019, 2020 and 2021.

“We have long believed in the promise of renewable energy, and we believe now is the time to add large utility-scale solar generation, as the costs of construction have come down and while federal tax credits remain in place,” Gordon Gillette, president and CEO of Tampa Electric, said in a prepared statement.

The agreement also includes a “general” base-rate freeze, though the company would be able to recoup the additional costs of solar projects through rates. The company said in a news release that the solar projects would cost typical residential customers about $1 a month and would help save money that otherwise would have to be spent in the future on power-plant fuel.

“Our customers have asked us for more solar technology — and we heard them,” Gillette said. “This expansion in solar power will have minimal initial rate impact and will be cheaper for customers in the long run.”

The Public Service Commission in 2013 approved a settlement agreement in a Tampa Electric base-rate case. That agreement is scheduled to expire at the end of 2017. As a result, the company and the Office of Public Counsel, which represents consumers in utility cases, began talks late last year about reaching another agreement, according to the filing Thursday.

Base rates make up a major part of customers’ utility bills and can lead to lengthy, costly hearings at the Public Service Commission. As a result, utilities and representatives of customers and businesses often try to reach negotiated agreements that, ultimately, require approval from the Public Service Commission.

Duke Energy Florida last month submitted to the commission a wide-ranging proposed agreement that deals with issues including base rates and solar energy. That proposal is pending.

Tampa Electric has about 745,000 customers in Hillsborough, Polk, Pinellas and Pasco counties. While the proposed agreement would largely freeze base rates, other parts of customers’ bills fluctuate. For example, utilities pass along costs of power-plant fuel, with the amounts determined each year. Also, utilities can recoup storm costs — an issue that could be prominent in the coming months because of Hurricane Irma.